Does it really make financial sense to buy used over new?

I've bought mostly new cars over the years and some (like my 2012 Silverado) I plan to keep for a long time. Just by chance my previous 2018 Mustang GT Premium was actually a good deal since I figured it only cost me $80 something over 4 1/2 years per month and it was new, reliable transportation. My Cadillac was bought new also but that's not such a good deal but I plan to keep it a long time. My wife's '18 Cherokee we bought new has been flawless and we plan to keep it a long time. Unless you really need to pinch pennies, buying new and keeping the car a while IMO is the way to go.
 
Depends what you buy. If you buying a Toyota, probably not because a 5-year old one isnt much cheaper than a new one. If youre buying anything American it does because they depreciate a lot faster.
Back in my days when I drove Ford trucks I would buy ones that were 5 years old because they were often $10K cheaper than buying the same thing new and they always came with at least a 1-year warranty. Even at 50K miles, I still felt like they were essentially new trucks.
 
My opinion....new cars are not worth the price. I tend to buy a 2-3 year old car with 30k miles or so for $10k+ lower than new car price. Unless abused it tends to be a better deal. Almost new-ish and should have plenty of run-way before major maintenance/service is needed.

I'm mechanically inclined so I fix all my own stuff and have a habit of bringing cars back from the dead, probably when they shouldn't be. Usually a cheap beater with mechanical problems that I bring back to life. By the time I'm done with it I have no car payment and after replacing a ton of parts I'll have a pretty good vehicle.

The problem is the $15k+ cars that have 100k+ miles. I'd hate to have a car payment and also be fixing the thing all the time. Been there, done that. If I know the history of the car and the owner that's one thing....but it is definitely a gamble.
 
The problem is the $15k+ cars that have 100k+ miles. I'd hate to have a car payment and also be fixing the thing all the time. Been there, done that. If I know the history of the car and the owner that's one thing....but it is definitely a gamble.
Yep, used cars are too expensive to fix.
 
BITOGer: won’t buy one $40K new vehicle cause it costs too much.
Also BITOGer: has 6 used cars that all cost $10K each.
It's useful to buy cheaper used cars if you want cars for different purposes. 🙃

Honestly I don't think new cars make financial sense unless you don't take much of a financial hit trading it (truck that holds its value or something) or keep it for a long time. The exception is something used for a business that can be a tax write off or something you need to make money every day with a warranty. Many people trade their vehicles in for new ones just about the time they take the biggest value hit.

In the Northeast or any other salt belt state, the minute you drive a vehicle through the salt it becomes a ticking rust bomb. I see trucks that stickered for $80-90k a couple years ago here that already have fender rot.
 
It's useful to buy cheaper used cars if you want cars for different purposes. 🙃

Honestly I don't think new cars make financial sense unless you don't take much of a financial hit trading it (truck that holds its value or something) or keep it for a long time. The exception is something used for a business that can be a tax write off or something you need to make money every day with a warranty. Many people trade their vehicles in for new ones just about the time they take the biggest value hit.

In the Northeast or any other salt belt state, the minute you drive a vehicle through the salt it becomes a ticking rust bomb. I see trucks that stickered for $80-90k a couple years ago here that already have fender rot.
RV’s, boats, motorcycles, and other luxury items don’t make financial sense either. Nor does traveling and going on vacation. Nor does eating out vs eating at home. Tons of things people do everyday make absolutely no sense if happiness and fulfillment isn’t part of the consideration. Not every decision is all about the dollars and cents. It’s perfectly ok to buy/do something just cause you want to. Even 6 owning vehicles 😉
 
New cars are not very repairable. $7K to 10K repairs over 10 years. Instead of repairing the 2013 Fiesta I bought new, I am considering repairing our 3rd gen 99 Escort as it has about the same performance, MPG and is easier to work on and to get parts. You are going to need to replace the crap Chinese tires on your new car pretty soon. I would definitely rebuild my 74 Ford F350 1 ton camper special before shelling out $100K for a new comparable pickup today.

Might be cheaper to lease a new one if you don't drive much.
 
I have depreciation figures going to to 1973 which covers 4 new cars and 7 used cars. The first new car was bought in £2197 so it's pointless talking in terms of the cash value lost without re-basing it for inflation. Simpler to calculate the average percentage loss per annum.

The depreciation for the 4 new cars ranged from 11.8% per year to 23% per year. No prizes for guessing that the lowest deprecating car was kept the longest at 3.8 years and the highest depreciating car kept for only 1.3 years

The depreciation for the 7 used cars ranged from 4.5% per year to 10.7 % per year. Same trend applies as above with cars being kept for between 3 years and 21 years.

For me annual depreciation costs dominate other running costs. I only ever bought new cars when I was being paid to do miles on business. With low annual miles in retirement, a new car makes no financial sense at all when it isn't even being used every day. Better having the money invested earning an income rather than depreciating sat in the garage.

My current used car a Mercedes C class is just coming up for 10 years in my ownership and depreciation is running at 8.8 % per year. I'm comfortable with that because it only cost £8200 at 5.5 years old. Had I bought new back then I'd now be looking at in excess of a £20,000 loss.
 
RV’s, boats, motorcycles, and other luxury items don’t make financial sense either. Nor does traveling and going on vacation. Nor does eating out vs eating at home. Tons of things people do everyday make absolutely no sense if happiness and fulfillment isn’t part of the consideration. Not every decision is all about the dollars and cents. It’s perfectly ok to buy/do something just cause you want to. Even 6 owning vehicles 😉
Of course it is. I buy things because "I want it" all the time. Saying it makes better financial sense is different though.
 
I recently purchased a new F150 Lariat 5.0. $66K OTD. While no bargain, I fully expect it to last 15 years and get better MPG than the 2009 Lariat it replaced, saving about $700-1000 per year. That's $4,400 per year in capital costs, minus the fuel savings.

Now if Allstate would pay me for the totaled old truck, the capital costs would be on the order of $2,600 per year including fuel savings.
 
New base model or something that's already fully depreciated are the ones that make sense to me ...
I normally only buy new, but the absolute base model with what I need only. My current 2024 Silverado Custom I bought in Feb is an example of this. I didnt want allow wheels but it came with the Custom package that added stuff I “needed.”. I got that for 40k out the door. While that is still way crazy for a new truck (it made me sick), what I get out of this is a truck that can pull a travel trailer across country with good piece of mind that is comfortable for family. Additionally, I can run my own maintenance schedule from the get-go. I never get rid of vehicles with less than 185k on them. It seemed like used trucks at the time weren’t looking much better $$ wise.
 
I've never purchased a new car, and I may never do so, but this is due to the fact that I do all my own repairs, and I'm fully aware that puts me in a different scenario than most. Further, cars are liabilities not assets, everyone knows this. Now, don't get me wrong, with creative accounting, the liability and associated costs of car ownership can be mitigated, but that process does not apply to me because our household income is below the overall average. What I can say though is, I've always been a saver, and financially responsible, I don't window shop. Finally, just because I can buy a new car, which I can (but nothing exotic), doesn't mean that I should, I have other priorities in my life (education, home ownership expenses, etc.)
I do all of my own repairs also (once new vehicle is out of warranty). However, I got to say I dont mind going a period with only doing maintenance procedures on a rust free vehicle. The longer period I get before having to crawl under a car in the driveway to replace lower control arms, coil
over struts, engine mounts, etc. the better. It is those major wear parts that start to go around 100-125k that can be a nuisance. Stuff like alternators always seem to need replacement when its snowing and 19 degrees. Getting a new car buys me some time before I have to do that.
 
I usually buy a CPO BMW or M-B. Depreciation is my friend. For example, in 2018 I bought a CPO 2015 E84 X1 M Sport for @$23,000. There was absolutely no new SUVs I wanted that cost less than $35,000- never mind $23,000.
 
It does if you want something that's outside of your price range new.

I bought a 2006 LS430 in 2016 for $14k, paid cash. That's the first time I paid cash for a car over $2k. Here it is 2024, I've had it 8 years, virtually nothing broke, and I drove it 65k miles (missed a year during covid or it would be almost 80k). If I could buy another car today for $14k cash and "love" it, and it would roll problem free, I would. But I'm not naive. Everything was cheap in 2016. 93 Premium was $1.819 at the expensive station.

Now, I'm realistically budgeting over $100k for our next vehicle. Should I get it used? What if it's $72k used?

Car money is throw away. So be prepared to throw away one's money. Throwing away less, is better than more. And yes the words are extreme--am I throwing away $100k+ for our next car? Yes and no. I do expect to drive it for 15+ years, I'm not replacing it in 2-3 years. But, the money is in fact lost.
 
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